I. Match the correct descriptions to each of the three components of credit administration.

A. Documentation (1, 2 or 3?)

B. Monitoring (1, 2 or 3?)

C. Re-classifying (1, 2 or 3?)

1. It involves undertaking regular reviews of a borrowers financial statements and evaluating changes in a borrowers business.
2. It provides timely, relevant and thorough information for loan approval, security and monitoring.
3. It involves determining new level of credit risk associated with a borrower

II. Which of the following statements is NOT true about credit administration?

A. Proper credit documentation practices allow for more flexibility to respond to changes in a borrowers circumstances.

B. Appropriate credit administration and documentation practices allow for better information for more informed decision regarding actions taken towards a borrowers account.

C. Credit administration is about documentation, ongoing monitoring, and possibly re-classifying a borrower before a loan has been made.

D. Credit administration is important for identifying problems in a borrowers account and reducing the risk of credit default.

III. Match the following credit documents into the appropriate categories:

1. Term sheet (A or B?)

2. Annual review (A or B?)

3. Monthly / quarterly report (A or B?)

4. Loan agreement (A or B?)

5. Commitment letter (A or B?)

A. Loan approval documentation

B. Monitoring documentation

IV. Which of the following are monitoring documents commonly provided by a borrower on a monthly or quarterly basis? Select all correct answers.

A. Unaudited financial statements

B. Commitment letter

C. Tax returns

D. Compliance certificates